Shares of the country’s largest commodity derivatives exchange MCX crashed four per cent to ₹1,563 on Friday after the exchange cancelled mock trading on the new software being developed by Tata Consultancy Services. The exchange had been holding trials for last few days to ascertain in stability during peak trading and make investors accustom to the new software.
Last December, the exchange had renewed the agreement with current service provider 63 moons technologies (formerly Financial Technologies) for two quarters. The service agreement with the erstwhile promoter of the exchange comes to an end in this June quarter.
The exchange zeroed in on TCS as the vendor for the development of the new platform in February 2021.
In a circular on Thursday, MCX said, “the exchange had proposed a mock trading session on June 22, from 5 pm to 11.30 pm which stands cancelled.” Earlier this week, the exchange had proposed a mock trading session on June 19 also but cancelled the same.
PS Reddy, Managing Director, MCX, in a recent investors call said members have been participating in the mock trading and the interest has increased. The phase two of this kind of mock has been happening for last three months and hopefully this month that intensity will increase among the members and the exchange should be able to go live, he said.
Penalty clause
Asked whether there is any penalty clause on TCS in case of delay, he added yes, there are penalty clauses and they will kick in obviously, but then every penalty has a cap.
The software support and maintenance agreement between 63 moons and MCX, which was originally amended on September 27, 2014, and was set to end on September 30, 2022, was extended for an additional three months until December last year.
Though mock trading has been cancelled in past two occasions, this one coming close to the deadline has raised concerns over the exchange’s future course of action, said an analyst.
“Worst come worst, the exchange has to renew the contract with 63 moons for another quarter at a higher fee,” he added.
The benchmark Sensex was down 260 points or 0.41 per cent to settle at 62,979, while NSE Nifty declined 106 points or 0.56 per cent to end at 18,665 points.